Bank of New Zealand has become the latest bank to raise its mortgage rates, leaving Westpac as the last of the major banks to make a move.

Last Thursday, the Reserve Bank increased the Official Cash Rate from 2.5 per cent to 2.75 per cent, the first of a series of projected rises over the next two years.

BNZ has raised its TotalMoney floating rate to 5.99 per cent, and its standard floating rate to 6.19 per cent.

Kiwibank, ANZ and ASB all passed on the full rise to customers last week, lifting floating mortgage rates to 5.9 per cent, 5.99 per cent and 6 per cent respectively.

The Reserve Bank's decision has less direct impact on fixed-rate mortgages, with the market having mostly priced in the well-signalled increases.

However, BNZ also raised its six-month fixed rate to 5.49 per cent, up 24 basis points, and its one-year rate from 5.49 per cent to 5.69 per cent. But it cut its three-year term to 6.29 per cent, the lowest rate among the big banks.

Economists warn floating mortgage rates, which have sat around 5.75 per cent for more than three years, could rise to about 8 per cent by 2016.

With the majority of mortgage customers on either floating or short-term fixed rates, the increases will quickly hit borrowers in the pocket.

Many are expected to lock into fixed rates, heightening the recent shift away from floating mortgages.